Federal Government Approves Payments to 1,240 Local Contractors

After a prolonged impasse over unpaid contractual fees—reported to exceed N4.7 trillion—the federal government has announced that it will pay more than 1,240 local contractors nationwide.

Finance Minister and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, approved the payments following a thorough verification and reconciliation by the ministry to ensure that only duly validated obligations are settled, said the ministry’s spokesperson, Efe Ovuakporie.

Contractors affiliated with the All Indigenous Contractors Association of Nigeria (AICAN) had repeatedly staged protests at the Federal Ministry of Finance headquarters and the FCT Secretariat to demand payment of outstanding debts for completed and commissioned projects.

The most dramatic protest occurred last December, when the contractors barricaded the ministry’s main gate for days with a mock coffin of former Minister Mr. Wale Edun, preventing any entry or exit.

They alleged that the government had been issuing payment warrants without cash backing, likening them to “dud checks.” They also criticised the central payment system of the Office of the Accountant General of the Federation (OAGF) and the Ministry of Finance, calling for a return to older payment methods.

The dispute continued until Edun was recently removed in a minor cabinet reshuffle, which brought Oyedele into the role.

The ministry added: “The Federal Ministry of Finance has approved payments to more than 1,240 contractors, providing immediate liquidity support to businesses across the country and reinforcing the federal government’s commitment to meeting its financial obligations.”

“The approval, granted by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, follows a diligent verification and reconciliation undertaken by the Ministry to ensure that only duly validated obligations qualify for payment.”

“The payments cover contractors across various Ministries, Departments and Agencies (MDAs) and represent a significant step in addressing long‑standing payment obligations, particularly those affecting indigenous businesses and small and medium‑sized enterprises (SMEs).”

The statement further noted that contractors prioritized for payment in the most recent batch were those with verified claims of N100 million or less.

The release of funds is expected to provide immediate relief to hundreds of businesses, enabling them to return to project sites, pay workers, settle suppliers, meet financial commitments, and support economic activity across the country.

“This development reflects the Ministry’s commitment to translating policy objectives into tangible outcomes by resolving inherited obligations in a transparent and fiscally responsible manner.”

“Over the past few months, the federal government has processed payments exceeding N700 billion across various categories of verified obligations owed to local contractors.”

“Within the month of May alone, approximately N436.6 billion in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” it further explained.

By prioritising a large number of smaller contractors rather than concentrating payments among a few large beneficiaries, the government said it was broadening the economic impact of these disbursements, supporting businesses across different sectors and regions of the country.

It noted that the latest payments were expected to strengthen confidence among contractors, suppliers, and service providers doing business with the government by demonstrating the government’s commitment to honouring duly verified obligations.

“For many beneficiaries, the release of funds represents more than a financial transaction. It provides the certainty needed to sustain operations, preserve jobs, complete ongoing projects, and contribute to economic recovery and growth.”

“The Ministry remains committed to maintaining fiscal discipline while ensuring that legitimate obligations are settled in a timely manner going forward to substantially reduce outstanding liabilities over time, strengthen confidence in public financial management, and support the effective delivery of public services and infrastructure,” the statement concluded.